Roth IRA to be more accessible, but may not be best for all

— -- Ever since its inception 12 years ago, the Roth individual retirement account has been popular with investors who love its simplicity.

Once you turn 59½, withdrawals are tax-free. You don't have to muck around with required mandatory distributions when you turn 70½. If you don't need the money, you can leave your Roth to your kids, who will remember you fondly when they take their own tax-free withdrawals.

But not everyone who wants a Roth can have one. You can't contribute to a Roth this year if your modified adjusted gross income exceeds $176,000 if you're married or $120,000 if you're single.

While the law allows investors to convert a traditional IRA to a Roth, the income cut-off for that is even lower: $100,000, for single and married couples who file jointly.

Soon, though, these barriers to a Roth IRA will crumble.

Starting in 2010, the income limit on Roth conversions will disappear, providing a backdoor way for anyone who has an IRA to own a Roth.

Brokers and financial planners are eagerly informing their clients of this opportunity to shelter their retirement savings from taxes.

Many are advising their clients to put money in a non-deductible IRA now so they can convert it next year.

But converting isn't for everyone. Reasons you shouldn't convert your IRA to a Roth:

•You think your tax rate will decline when you retire.

Tax rates are expected to rise in the next few years, especially for the wealthy. But that doesn't mean your own tax rate will go up.

If you're in a high tax bracket now and expect to drop into a lower one when you retire, you're better off leaving your money in a traditional IRA and paying taxes when you take withdrawals, says Andrew Friedman, a tax attorney and consultant to Eaton Vance, a financial services firm.

Otherwise, he says, "You're paying tax on the conversion at a high rate and pulling money out at what would normally be taxed at a lower rate."